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Apple taps TSMC to build custom iPhone 5G modem in 2023

Written by Nikkei Asia Published on     3 mins read

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US company aims to cut reliance on Qualcomm for key components.

Apple is forging a closer partnership with Taiwan Semiconductor Manufacturing Co. in hopes of reducing its reliance on Qualcomm, Nikkei Asia has learned, with plans to have the Taiwanese chip titan make 5G iPhone modems from 2023.

Apple plans to adopt TSMC’s 4-nanometer chip production technology to mass produce its first in-house 5G modem chip, four people familiar with the matter said, adding that the iPhone maker is developing its own radio frequency and millimeter wave components to complement the modem. Apple is also working on its own power management chip specifically for the modem, two people briefed on the matter said.

In the latest iPhone series, all of these components are provided by Qualcomm of the US.

Apple has been attempting to reduce its reliance on Qualcomm and gain more control over vital semiconductor components for several years. The two US companies settled a lengthy legal battle over patent royalties in 2019, and Qualcomm recently confirmed that its share of iPhone modem orders will drop to about 20% in 2023.

In addition to saving money on fees it currently pays to Qualcomm, developing its own modem would pave the way for Apple to integrate TSMC’s chip with its in-house mobile processor, multiple sources said. This would give the US tech giant more control over its hardware integration capability as well as boost the chips’ efficiency. Currently, most mobile chip developers integrate 5G modem systems onto the processor chip.

Modem chips are crucial components that determine call quality and data transmission speeds. The segment has long been dominated by Qualcomm, which built a large patent wall around the technology, as well as Taiwan’s MediaTek and China’s Huawei Technologies. Intel, which supplied modem chips to Apple alongside Qualcomm since 2016, dropped out of smartphone modem chip development and sold the business to Apple in 2019.

While Apple has used its own A-series mobile processors for over a decade, developing mobile modems is much more challenging, as they must support all older communication protocols—from 2G, 3G, and 4G to the latest 5G standards.

TSMC has been a vital partner for Apple in its strategy of designing more of its own components and is the sole producer of iPhone processors and M1 Mac processors. The Taiwanese tech titan also has hundreds of engineers stationed in Cupertino, California, to support Apple’s chip development road map, one person with knowledge of the matter told Nikkei Asia.

For the new 5G iPhone modem, sources said, Apple is using TSMC’s 5-nm chip production to design and test-produce the chip. It will then use the even more-advanced 4-nm technology for mass production, the sources added. Commercialization will not come until 2023, people familiar with the matter said, in part because of the time needed for global carriers to verify and test the new modem chips.

Apple will also use TSMC’s 4-nm tech for its iPhone processor in the second half of 2022. The company is also one of the first to adopt TSMC’s most advanced 3-nm technology and will use it in iPads next year, Nikkei Asia first reported in July.

Apple is also finalizing plans to use 3-nm tech for iPhone processors as soon as 2023, multiple sources said.

Apple and TSMC both declined to comment for this story.

This article first appeared on Nikkei Asia. It’s republished here as part of 36Kr’s ongoing partnership with Nikkei.

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